The Little Red (Face)Book

When I spoke at Facebook about In The Plex recently, rumors were swirling that the social networking giant was about to enter China, supposedly in a partnership with the search engine Baidu. So I made sure that my talk to a dining hall full of FB’ers included the cautionary tale of what happened when Google met China. (An excerpt of the saga as detailed in my book appeared in Fortune.)

Though similar in some ways — focus on engineering, full-on embrace of internet values — Facebook and Google are quite different companies. Their China efforts will also undoubtedly vary. But some of the challenges that Facebook will encounter will be just as tricky as the ones Google faced. Those problems ultimately led to Google’s reconsideration of the enterprise.

So I suggest to Facebook that its leaders think hard before taking the leap.

Here’s some areas where Facebook must find good answers to tough questions before it makes that China leap.

Censorship

In order to do business in China, Google had to make a horrendous compromise: agreeing to filter its search results according to the demands of an oppressive government striving to deny vital information to its citizens. Facebook will have to make a different kind of compromise: somehow preventing free discourse when it comes to speech that threatens the authoritarians in charge of China.

This may not affect the core of Facebook’s activities, most of which are prosaic. But how will the lines be drawn?

Will there be an agreement in principle of verboten content, or will Facebook have to remove offending posts and pages every time China demands it?

What happens when an international friend of a Chinese Facebook user posts something — or sends a message — with content that the Government doesn’t like?

Will Chinese censors monitor Facebook friend feeds?

Privacy

One of the most shameful corporate episodes in internet history was Yahoo’s decision to turn over to the Chinese government the identity of a dissident who assumed anonymity. The user got a 10-year jail sentence, and Yahoo is still scorned.

What will happen to Facebook’s users when they come under scrutiny from the government?

Will the Baidu-Facebook partnership turn over private information with a single phone call from an official? What about the connections between Chinese citizens and Facebook users on other countries?

If I, as a U.S. citizen using Facebook in the United States, am a “friend” of a Chinese user and that user has access to my private information, what assurances will I have that the Chinese government doesn’t have that access too?

Conversely, will Chinese Facebook users be walled off from the rest of the world?

Baidiu as Partner

When I spoke to Baidu CEO Robin Li about censorship, he told me that his problem was not political, but that it was a technical annoyance that slowed things down.

In other words, Baidu wants to stay clear of issues of free speech, period. Is Facebook comfortable with such a stance? Also, a partnership with Baidu may affect Facebook’s efforts to ally with content-holders like Hollywood studios. Though it has recently attempted to become a better copyright citizen, Baidu has a reputation as a powerful enabler of copyright infringement.

Global image

Facebook’s prominence in recent Middle East democratic uprisings has put it in an awkward situation. Facebook executives never planned for the service to become a rallying point for dissidents, and they take pains to note that the phenomenon is simply a function of its users making use of a powerful tool.

Yet all of this also is a source of pride for Facebook, and the company seems happy to accept the bounties of the subsequent halo effect. But what would happen if Chinese activists made efforts to create a Jasmine Revolution page, and Facebook was asked to take it down? Or institute censorship rules to make sure it never appears in the first place? Ask Google about tarnished halos.

Whether it goes to China or not, Facebook is staring down the gun barrel of regulation. Its M.O. when it comes to privacy issues — recklessness followed by apologies and amends — has already worn thin. Being seen as a tool of the dictatorship in China would hobble Facebook’s efforts to convince legislators and regulators that its overall mission is positive, and its efforts to balance sharing and privacy should be seen in a favorable light.

There’s also a possibility that the Chinese experience may tarnish the brand with its users, though after its painless survival of the Zuckerberg portrayal in The Social Network, one has to conclude that Facebook is covered by some pretty mighty Teflon.

Nonetheless, before Facebook leaps into China, I’d advise its executives to step carefully. The last time a company heady with hubris tried this, it stumbled into a world of pain.